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How to Measure the ROI of Public Relations

Despite the fact that usually ROI is considered in financial terms (the amount of money totaled from public relations campaigns after subtracting the costs), there are many other things that can be considered to calculate return on PR investment.

In the past, the main measurement criteria was the quantity of coverage, channel of delivery and media type. Other factors included type of mention (feature or exclusive), whether the competitors were mentioned along, source credibility and popularity. Some of these factors applied online as well. For example, for a tech startup, features on sites like TechCrunch, Mashable or ReadWriteWeb represented (and for some still do) the holy grail of a PR campaign. Today, tracking PR ROI also involves measuring social media ROI, and measuring outcomes is the most important aspect of this equation.

What business owners need to consider first when calculating PR and Social Media ROI is that they represent earned media, and earned media requires ongoing management, time and flexibility. It is not enough to do a campaign today, with no follow-up tomorrow, unless the results desired are “flash sales.”

Also, they need to understand the PR ROI cannot be reduced to a simple accounting equation. An additional, intangible value, needs to be considered, and this value may take a while till it becomes “cash.” And because PR and corporate communication strategies are often employed to achieve non-financial objectives, there are several other metrics to consider. Here are a few of them:

PR Mentions

Counting media placements: the main role of public relations is to reach out to the media, and to communicate a company’s message. Counting media placements is one way to measure the ROI, and quite indicative if you get massive coverage on various publications. Here consider how many of these mentions are main stream or first tier (like TechCrunch, Business Week, etc) and how many are less popular, yet highly influential. Everything that comes after these counts as a media mention, but weights less in terms of ROI.

Assessing quality: after counting, you need to consider the quality of these placements: will they influence behavioral changes in those who read them? Will these changes have a positive impact on their attitude towards your business? Are they credible? Do they feature your company exclusively? Is the tone positive? Do they confer your message accurately?

Viral impact: online, media coverage extends to social media networks, with readers sharing the news, and reacting to them. There are several ways to measure these reactions, beyond number of mentions. You need to consider the number of influencers mentioning your brand; their tone of voice; and the sentiment of the message.

Social Media Metrics

Engagement vs. coverage: it is generally agreed that the most important aspect of social media is the quality of the conversation, and not the “coverage.” In other words, when you measure the PR ROI on social media, you need to focus on community and conversation, rather than the number of mentions. Are people really talking about your brand, are there influencers who carry the conversation? Is the conversation affecting your brand’s social media presence?

Community growth: as an effect of social conversations related to a specific PR campaign, your brand should experience some kind of growth relating to its own social media presence: more Twitter followers, more Facebook likes, etc. Because likes and followers can be bought, to quantify community, you will need to assess whether the people following or liking something are truly interested in your brand. Are they active users, conversing about issues related to your business? After they follow, do they participate in conversations on your social media channels?

PR Outcomes

Behavioral impact: this one is perhaps the most important PR outcome to consider, because it reflects directly the success of a campaign. How many customers called to inquire about your products/services? Are more people recommending your brand than before? Are you generating more sales? Is your site receiving more traffic from a media placement, and how many of those visitors are taking an action (like purchase, call your customer support number, etc)?

Growth: as a result of everything mentioned above, in an ideal world you should experience a kind of growth that doesn’t refer to flash traffic to your site. If you are not selling anything (for example social startups) you should see more user registrations, and unique user growth. Maybe more app downloads if that’s what your business is all about. Product sales, if you are in eCommerce and you had a concrete campaign based on a product launch. No matter how you look at it, growth means customer/user retention and revenue growth where this metric applies. If a PR campaign doesn’t have this outcome, it has failed.

Long term outcomes:

When employed properly, PR campaigns have an immediate impact, a mid-term and long-term effects. These are values that can be quantified as follows.

Brand loyalty and advocacy: the role of PR is to increase brand awareness, and generate good will towards a business. If this succeeds, it will boost brand loyalty, and generate behavioral changes that create brand advocates. Are people still talking about your brand, long after a campaign has ended? Do they recommend you on social media, blog, forums, etc., after a purchase? Are they returning to your business for more services? For example, on social startups and apps: are they active users?

Cost savings: PR activities may even result in cost savings – for example reduced customer complaints; declined criticism or opposition; prevention of media crisis that could damage a brand’s reputation, resulting in less sales, etc.

Better market positioning: PR may help your brand become a recognized influencer in your niche, giving you a clear advantage over competitors.

Instead of conclusion

While there is still no mathematical formula to quantify PR ROI, the guidelines above should give you a fair idea what return on PR investment is all about. But keep in mind that, for PR to work effectively, you’ll need to align all your departments (sales, marketing, customer support, etc) to work along the same lines. If PR manages to paint your brand in shiny colors, there will be high expectations from the public, and your business must be ready to meet them. The way your company acts needs to be consistent to its PR message. Many times, PR campaigns fail because customer support is faulty, or because other departments were not briefed. Do not begin a PR campaign without aligning your key interests and making sure that everyone is on the same page.